Contractor Fears Going Under Due to Late Payment Issue

UPDATE Inside Towers received an anonymous letter in response to our recent story (“The Check is Not in the Mail”) concerning allegations that larger companies have extended payments to tower contractors to the breaking point, offering as much as 120-day “take it or leave it” terms. Smaller contractors assert they’re being used as a bank and those terms can be crippling.

The writer said he is a Verizon contractor and afraid to reveal his name for fear of losing future work. “Many of us small contractors are about to close our doors due to the intimidation and practices on payments from these major carriers,” he writes. The individual alleged Verizon is asking contractors to build this year, but not invoice them, nor whatever company hired them for the carrier work, until 2019. He also asserted through its “Minor Materials Program,” the carrier is now expecting contractors to source, pay for, insure and warehouse materials that it used to provide.

A Verizon spokesman said he couldn’t comment on the details specifically. Verizon Director of Corporate Communications Bob Varettoni told Inside Towers in an interview that in general, the company’s long-standing payment term is 90 days and 30 days for construction projects. However, he said: “Verizon is committed to doing the right thing and following sound business practices in dealing with our suppliers.” To illustrate his point, Varettoni offered to help the anonymous letter writer.

Another individual wrote to us on this topic. An implementation manager for a major telecom company, told Inside Towers in a letter that he understands the budgetary controls that affect payment schedules. “Saying that however, I cannot accept nor excuse the people and policies that drive large telecom companies to force contractors to finance their projects.” He calls it “poor policy and [a] terribly unfair management practice to expect contractors to bear more lengthy terms.”

National Tower Erectors Association Executive Director Todd Schlekeway told Inside Towers previously, the payment issue involves companies at all levels of the wireless infrastructure ecosystem. Tuesday, he said in an interview that NATE’s leadership is embarking on a “5G Opportunities and Challenges” meeting tour this fall with top industry corporate executives from these major companies, and “this payment terms issue will be part of our broader discussion.”

Schlekeway hears about the payment terms problem frequently from the association’s member companies. “We believe this issue needs to be resolved. It’s severely hamstringing companies at a time when the industry is facing a labor shortage and when these companies need to have the capacity to conduct operations efficiently in order to provide services related to network densification for 5G, the broadcast repack, FirstNet and other tower infrastructure work,” he said.

(Coming up tomorrow, what NATE members say about the late payment issue.)  

By Leslie Stimson, Inside Towers Washington Bureau Chief

August 2, 2018

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